Too Much Sauce Hollandaise? Pharma, France, and Socialism

Will France’s new socialist president, François Hollande, prove too strong for pharma’s taste? Reflector, Pharm Exec’s EU correspondent, reports.

So it has happened. A leading European country has gone against the predominant political grain, and elected a socialist head of state. France is now ruled by François Hollande, a mild-mannered but avowedly drug-industry-skeptical president. Is the sky about to fall?

Certainly, the rhetoric of the French socialist party has frequently been directed against industry profits—and drug industry profits in particular. And it has repeatedly evoked the risks of commercial interests perverting disinterested research and rational use of medicines. So there is wide agreement that pressure will emerge to cut overall drug consumption, by reducing volume, by bringing down the prices of medicines, and by boosting the use of generics.

Close reading of the runes at this stage of a new administration is as much a matter of studying new appointments as second-guessing upcoming policy announcements. And here too industry expectations are being edged towards the negative.

Hollande has just appointed his minister of health and social affairs. He has chosen Marisol Touraine, a specialist in social security, and a social and economics scientist. She figured in the French debate on health system reform in 2010, questioning some of the orthodoxies of the French approach. And her high-grade academic background includes studies at Paris’ notoriously left-wing elite political science school, Sciences Po.

Anxieties about anti-industry bias have been further fuelled by the new president’s appointment of Aquilino Morelle as his chief political advisor. Morelle, a high-flyer with a medical as well as a management background, was until now a member of the French inspectorate of social affairs. Since 2007, he has had specific responsibilities there for issues relating to public health and to medicines. So he certainly knows the industry. More to the point, he is certainly more than familiar with some of its less attractive aspects, since he was closely involved in the investigation into the adverse effects of Servier’s Mediator—the benfluorex antidiabetic now at the heart of a criminal trial and numerous civil law suits. Last year he also had a hand in producing a report on the not-unrelated subject of drug monitoring and post-authorization governance of medicines. He knows government too, since he worked ten years ago as technical advisor for former health minister Bernard Kouchner.

So there is plenty of material to fuel some drug industry hysteria—or paranoia—about what is in the legislative pipeline.

How justified are the fears? A closer look at the sort of things hinted at by Hollande and his party in the run-up to the presidential election offers some interesting nuances. For instance, one of the ideas circulating among Hollande’s people is to modify the French system of tax credits for research, so as to give smaller firms a better chance of benefitting. Bad news for Pfizer or Sanofi perhaps, but hardly fatal. And possibly a boost to some upcoming innovators.

Another near-promise from the Hollande set is to improve the environment for clinical research, by simplifying the related administrative procedures. No-one in the industry would deny that clinical trials are still bedevilled — in France as in many other European countries—by excessive bureaucracy and complexity. So there is certainly room for improvement there. It remains, of course, to be seen how far Hollande aims to make things easier for drug firms, since one man’s simplification can be another man’s complication. But again, the beneficiaries could well be smaller research exercises, currently heavily burdened by regulations that are designed predominantly to control large-scale multi-centre multinational trials.

And Hollande has explicitly backed the idea of supporting innovative firms—particularly biopharmaceutical companies—through changes to taxation and financing. Back in February, he told the bosses of a dozen biotech firms outside Paris that he considers that health and biotechnology industries are important for the country’s future. He said he understood the financing difficulties they face, particularly in funding clinical development, and promised to support a long-term vision that matched the necessary investment cycles for the sector. Among concrete ideas he threw into the debate were a specialised investment bank, regional seed funds, and adjustments to the French system of promoting young innovative companies.

Observers have been quick to note that among the companies at this meeting was Génopole, one of France’s most prominent bio-parks—since back in 2005, the special advisor to its director general was none other than Morelle, the new president’s new policy advisor. They have also noted that Morelle’s background also includes a spell as deputy director general at Meditech, a cluster dedicated to the use of high-tech in pharmaceuticals and healthcare. Some hopes may be rising—at least among France’s smaller, high-tech drug firm— that anti-industry socialist rhetoric may be leavened by at least some understanding of the challenges of innovation.

Nor should it be forgotten that the drug industry was not enjoying exactly a glorious period of friendly relations with the Elysée Palace when Nicolas Sarkozy was in residence there. As a reminder, one has only to look at some of the legislation that was coming into effect just as the supposedly pro-industry former incumbent was in his last weeks in office. A new pharmaceutical agreement piloted by his administration was reached reining back incentives for pharmacists to dispense expensive drugs, and promoting instead generic substitution. The French drug industry has also been complaining bitterly for the last eighteen months that it is being made vulnerable by levies that are penalising employment and investment.

Similarly, France’s drug industry association, LEEM, was writing angrily only weeks ago to the outgoing prime minister, François Fillon, about the new law introduced on health product safety. LEEM said it was not being adequately consulted on the implementing regulations. Among a wide range of complaints, LEEM highlighted particular concerns relating to rules on transparency of agreements between companies or with the state, to recommendations on temporary use and temporary authorisations, and on health economics in relation to medicines. The competitiveness of the industry and the credibility of the government’s health and industrial policy were at stake, said LEEM.

New rules on drug promotion—also hatched on Sarkozy’s watch—are also due to come in over the coming weeks. Advertisements targeting health professionals will be subject to new controls, including prior approval by a new agency for medicines safety, with only limited opportunities for submitting draft adverts. Industry executives were already venting their frustrations and expressing their fears long before Hollande came on the scene. So the echo of those accusations down the corridors of history should dispel any false nostalgia for the old administration, as a new administration takes shape and takes charge.

In reality, the real threat to the French drug industry—and to its peers right across Europe—is not the personality or even the health politics of the man in the Elysée. While French industry executives and fresh health ministry officials tussle over the arrangement of the seating arrangements on the passenger deck, the Titanic of the euro is still heading steadily for the iceberg represented by sovereign debt in Spain and Italy—and that presupposes it is not torpedoed even earlier by full Greek default and exit from the common currency. What Hollande chooses to do, up on the bridge with Germany’s chancellor Angela Merkel, is of much more significance, for the drug industry and for everyone else.

Written by Reflector for Pharmaceutical Executive.